Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
Correct Answer
$6848
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $5350 × 4% × 7
= $5350 ×4/100 × 7
= 5350 × 4 × 7/100
= 21400 × 7/100
= 149800/100
= $1498
Thus, Simple Interest = $1498
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $5350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 4% × 7)
= $5350 + ($5350 ×4/100 × 7)
= $5350 + (5350 × 4 × 7/100)
= $5350 + (21400 × 7/100)
= $5350 + (149800/100)
= $5350 + $1498 = $6848
Thus, Amount (A) to be paid = $6848 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5350, the simple interest in 1 year
= 4/100 × 5350
= 4 × 5350/100
= 21400/100 = $214
Thus, simple interest for 1 year = $214
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $214 × 7 = $1498
Thus, Simple Interest (SI) = $1498
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(3) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?
(4) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.
(6) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(8) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(9) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?
(10) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $9593 to clear the loan, then find the time period of the loan.